The Limelight Marketplace, the collection of high-end food, clothing and design booths in the building that once housed storied nightclub Limelight, is employing a new tactic. It's going to turn itself into one big department store. This was always just a bad idea.

In case you didn't hear, developers are turning '80s and '90s Chelsea superclub…
Read more Read more

Even Jack Menashe, the proprietor of the space—which had its heyday in the '80s and '90s as a nightclub and even earlier as a church—says that having dozens of different vendors in such a tight space wouldn't work.

Mr. Menashe says the original concept behind the Limelight Marketplace was sound, but "the only problem was the lack of size to really execute it properly." The market is only 30,000 square feet, and he estimated it would need to be about 100,000 square feet "to do the marketplace correctly."

Well, if you need 100,000 square feet to do it correctly, but you don't have that much space, then why even attempt it? The place was too cramped—full of tiny, intimate spaces, and lots of exclusive areas no one could figure out how to get into. Those are all good things in a nightclub but horrible in a luxury mall. And don't get us started on all the different food smells mingling together. Gross.

The space opened last May to decent sales, but interest waned as soon as the novelty wore off. Already some of the vendors in the space have been terminated. Menashe has hired a buyer and is spending $4 million to convert the space into one giant department store, similar to Barneys. It will reopen in September to again haunt us with the ghosts of nightclubs past.